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News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin. Business news and talk as the trading day unfolds on Wall Street. New. (CC)




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Us 38, Apple 18, China 16, Dupont 13, U.s. 10, New York 8, Nespresso 7, Google 7, Faa 7, Becky 7, America 7, Europe 6, Boston 6, Eric Schmidt 6, Cnbc 6, Eric 6, United States 6, S&p 5, Caterpillar 5, Virginia 4,
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  CNBC    Squawk Box    News/Business. Becky Quick, Joe Kernen, Andrew Ross Sorkin.  
   Business news and talk as the trading day unfolds on Wall...  

    April 23, 2013
    6:00 - 9:00am EDT  

cnbc. i'm becky quick along with andrew ross sorkin and brian sullivan who is in today for joe. brian, thank you very much for coming back. are you punch drunk yet? >> you know, i used to do this a long time in a life far, far away and did not realize how hard it is. kudo us to you guys. look at you. >> take it easy. >> united statit's early. >> i'll give you perhaps. >> it's easier when you do it every day. it's a lot harder to do split shifts like you are. >> no problem. tune in at 2:00 p.m. eastern today. >> you are allowed to plug when you're here this early. the dow is try for its 15th straight tuesday gains. tuesday gains, by the way, have made up 70% of the endecks's gain this year. there's a stat you almost never hear. so far, tuesdays have been good this year. this morning, though, there are some red arrows already before we even get to the opening bell. right now, dow futures down by about 12 points. s&p futures off by about three.
the big news is earnings today. anything can happen between now and the opening bell because we have a lot of companies that are on the way. as for europe, stocks moving higher in some of the early trading there. among the catalyst are better than expected pmi numbers from france, both the manufacturing and services components of the figure beat analyst expectations. however, german data missed analyst expectations and is we will have more from kelly evans in just a moment. >> we do have some dupont numbers that are just coming out. but i'm trying to go through them and i can't get this released right here. there you have it, though. you have 11.56 ex stems that is versus the $1.52 that was the estimate. so they're beating there. let me see if we can't get -- >> they also raised their dividend by 5%, so not a big rise. the dividend goes to 45 cents per share. so it's a slight increase in the dividend. the big through with dupont, pecky, is we're trying to watch
china. of course we had doug oberholman on caterpillar on yesterday. we're going to have to wait and see and dig in about what dupont is saying in china. >> he was interesting, though. he was talking about how they're actually, from his perspective, saying things seem to have stabilized in china. we'll see if ellen colman has the same to say. she'll be joining us to talk more about this. running through the details quickly. >> operating shares seem to be about 7% to 9%. a couple other things in here. q1 revenue webs $10.5 billion. okay. that's interesting because -- >> they're looking for full year -- i don't know if you guys have the earnings up. my machine is busted on this. but for the full year, they're looking for 385 to 405. can anybody tell me what they were expng f full year? >> i don't know what the full year is, but i just referenced agriculture the.that continues to be hot. the agriculture business was up 14% year over year. the weakness was in chemicals.
that was expected. so chemicals down 17%. agriculture was up 14%. a lot of people don't view dupont as an agriculture company, but that has increasingly been a focus. >> especially with the dealership from monsanto. so 385 to 405 is the full year outlook for earnings. 389 is where the street is right now. that's right in the middle of that range. she'll be joining us coming up a little later in the program to talk more about this. in the meantime, we've been watching what happened overnight in asia. as brian just mentioned, china stocks leading markets lower today and it came after the pmi numbers there showed an expansion in factory activity as ease. there were a couple of different things, including an earthquake that affected some of these numbers. again, brian, it's going to raise some big questions about what this means. and we'll hear more from ellen coleman. >> yeah, we will. it didn't give us a lot of guidance. >> no. >> here is our range and we're sticking to it, so no big change for dupont.
meantime, you have earnings and economic data. let's begin with the former. before the bell, we are going to hear from not only dupont, but travelers, lockheed martin and xerox. after the bell, you've got companies include at&t, yumm brands, norfolk southern and those are some big companies. but the name that is going to steal the show is that one, apple. the tech giant expected to post earnings of $10.01 per share. folks, that would be a 19% drop year over year, the first expected drop in more than a decade. now, revenue is seen rising 8% to 42.3 billion. he here as always is going to be iphone sales. the main driver of apple revenue, we're going to speak with analysts all morning to get their perspective on the name. but what is your take, america? log in to facebook and vote in our arm chair analyst poll. will apple tonight meet, beat or miss estimates?
as for the economy, here is today's calendar. >> how is the crowd sourcing experiment gone so far? i haven't looked at the results. >> the results for coming. >>? >> i can't even log in to the borrowing page. >> they've gotten some decent numbers that have come this. i think there are 1500 or 1700 -- >> but are they better -- >> they're good at it, but i think we have made the mistake of picking from predictable companies. that's why we started picking some trickier companies like apple. that's the one that's up in the air. nobody knows exactly what's going to happen. if you can beat on these companies, then we're going to be more impressed. >> apple generates a lot of attention and feedback. if i put out on twitter, will apple meet, beat or miss, some people will say it will meet, some will say it will miss and others will stay you stink, sullivan. >> but you will get responses by putting apple out there. >> anything you say on apple,
and i'm an apple lifelong user, and i referenced a couple weeks ago that i was going to buy a windows 8 machine because it was 200 and some bucks. people go crazy. the fan boys come out with their light sabers. >> apple is like -- in tv land, it's ratings bait. it's just -- people love their apple, they hate their apple and they have feelings about apple. >> i love that light saber sound effect. let's get to the economics calendar, thank you very much. here is today's calendar. and it is very housing focused. at 9:00 eastern, you get the fhfa house price index. an hour later, march new home sales. they're expected to rise by 0.7%. we'll watch the home builders like lenar, etcetera, on those. also at 10:00 eastern, is the richmond fed survey. becky talked about some stocks. we're hitting on dupont. let's check on the broader
markets. oil down about 0.9%. 88.39. brent crude down a little more, down 1%. rbob gasoline, because, really, you don't care about gasolioil. you care about gasoline, right? >> it's come down significantly. >> yeah, it has, which is good because that may counteract the effects of the payroll tax high. what about gold? let's check the commodities like gold, the ten-year. down about 7%. 7 bucks to $1414. there's been a bit of a move in sort of the euro. we want to keep an eye on that. there's your currency chart here in the ten-year treasury note. we talk about home sales. you always want to watch the ten-year treasury note. the yield right now is at 1 o.66. in corporate news this morning, japan says final permission to resume flights on boeing's dreamliner, it may come as early as thursday. that's earlier than expected. yesterday, boeing's engineers began install b reinforced
lithium ion batteries on all nippon airways jets. some investment banks that have been looking to sell businesses with liquid assets in order to appease regulators and bolster balance sheets. credit suisse cited the rule last summer as a reason for exploring that sale. also, a u.s. trade panel has ruled apple didn't violate a google patent to make the iphone. if it had been found guilty, the tech giant's popular devices could have been banned from being imported into the united states. google can appeal that decision. >> and we can ask eric schmidt. i know he's on to talk about his book -- >> he's going to be on at 8:45.
we can ask him about that, as well. i finished reading the book. it's about the future of the world. it's a book about sort of predicting what the world will look like 15, 20, 30 years from now and all of the issues that we'll be grappling with as a society, as states, as businesses. it talks about bitcoin and virtual currencies and even terrorism and sort of in the wake of the boston marathon attack. all of the issues around the responsibilities that people are going to have, how easy it is going to be to actually commit crimes, how easy it may also be on the other side to discover the crimes. i mean, it sort of goes through all of these different things and takes you to all these different places they traveled in the world. >> korea and what they learned because that is the most closed technological society in the world. google knows everything about you, voluntarily.
we talked about this yesterday. and now we're getting into, again, how much does the government know about you? if you look up how to make a bomb on any website, he has -- >> it's a whole chapter about how actually, these guys, reading his book, it makes you think these guys didn't know what they were doing. what he talks about is the future of stuff where governments can't get in at all. so they actually really won't be able to crack all of this stuff. but the true, smart criminals, and he even talks about the drug cartels in mexico have started to figure this out, who only communicate through encrypted communications. also, there's some crazy stuff going on. so it's very interesting. we will talk to him about that but also we should be talking about this news. >> let's talk about a few other stocks that you should keep your eye on this morning, as well. all of these are after the bell movers have last night. texas instruments posting better than expected first quarter earnings and revenue. and the company is forecasting growth from the current quarter on improving demand for its
chip. but ti's cfo says customers do remain cautious. you see that stock is indicated up by about 0.5%. shares of netflix getting a big boost after the company impressed investors with solid subscriber growth and better than expected first quart either profits. this was the second quarter in a row that netflix has surprised to the upside. shares are up more than 80% alone and ma makes this company one of wall street's hottest performers. up about 23% on these numbers from last night. that's a gain of $41. if you take a look at shares of rent a center, though, they took a hit in the after hours trading. the rental company posted weaker than expected first quarter results. that company is cutting its full year guidance. it says delayed tax refunds and high fuel prices meant less money in its customer pockets. >> time now for your global markets report where kelly evans is standing by in london. kelly, what is stopping your headlines this morning? >> brian, good morning. it almost doesn't matter what is
topping headlines. the earnings were mixed, the economics were mixed. take a look at what's happening behind me. and i'll start with stocks this morning. we're seeing all of the major indexes rally. we didn't necessarily start off this way, but we've picked up momentum off the session. up 0.8%. to the cac 440, up 1.5%. maybe because the french pmi numbers were something less of a disaster. the xetra dax up 0.5%. we did get the flash pmi estimates for april, an important one because people want to know what momentum the eurozone started out the second quarter with. a level of 46 is well below the expansionary line. it indicates a continued contraction. as i say, we're nevertheless seeing bourses shake it off. the ftse mib, up 0.9 the%. the real headlines, you guys, are coming from the sovereign bond space. so take a look at what's been happening behind me and see if you can figure this one out.
on a day when we have commodities, with oil selling off, on a day when we're seeing fresh lows in german and u.s. debt, we're seeing fresh lows and peripheral debt. so look at this for italy. 3.995%. this is extraordinary. we are now back below 4%. we've started to breach -- started to reach, i should say, new multi year lows in the last couple of trading sessions, but these give a different tone to it. the ten-year in spain is down 3.4%. in fact, it was a ten-year german bund that make headlines this morning, as well. falling 1.9%. that's a new historical low. the message seems to be liquidity going into europe and if you want to try and understand why it may have less to do with any european news flow, more to do with the policies that japan continues to pursue and the fact that ja investors may now be part of the reason behind this reflationary trade happening across europe. so some fascinating things over here and it will certainly keep
traders busy today. guys. >> can kelly evans, thank you very much. now back to the investigation into the boston marathon bombing. scott cohen joining us now with the latest. scott. >> reporter: good morning, brian. this city and the families of the victims are taking steps towards healing the wounds. last night at boston university, a memorial service for the graduate student who was killed in the bombing. krystal campbell, another spectator killed was laid to rest yesterday. there will be a memorial abdomen funeral later this week for mr. collier. at the scene of the blast last night, an important transition. the fbi turning over the crime scene on boylston street back with the city with the flag that flew over the finish line presented to the mayor. they are already now clearing the way on boylston street and it looks like they could reopen
that street any day now, perhaps today. now, to the accused bomber, dzhokhar tsarnaev. reportedly, he is being cooperative. he has told investigators, at least in writing because he's having difficulty speaking, told them that he and his brother acted alone. they did not have any influence from outside groups. and that they were motivated by religious fervor, according to sources. yesterday in his hospital bed, he had his initial appearance before u.s. magistrate marianne bohler. a probable cause hearing has been set for may 30th. he is charged with two counts that carry potentially the death penalty. a grand jury could be convened to charge him with other crimes. the administration rejecting calls to reject the criminal justice system and try him as an enemy combatant. >> he will not be treated as an enemy combatant. we will prosecute this terrorist through our civilian department of justice.
under united states law, united states citizens cannot be tried in military commissions. >> that has provoked anger from those on capitol hill saying by trying him through the criminal justice system and reading him his rides, which were done at that initial appearance yesterday, that the administration is missing out on some meaningful intelligence. >> he will get all the rights associated with a federal court trial. he's an american citizen. i'm all for that. but most americans want to find out what he knew, who he associated with, does he know about terrorist organizations within our without the country or trying to hurt us, does he know fwhig about our future. >> meantime, members of congress will get a closed briefing or get a pair of closed briefings today from administration officials about that 2011 interview with tsarnaev's older brother, tamerlan, about why they didn't interview him again
when he returned from russia last year. >> skoe scott cohen, thank you very much. coming up, as the dow tries for its 15th straight tuesday gape, we're going to talk markets and more. the stories more likely to drive the trading day, that's next. and dupont ceo ellen coleman is going to join us live at 8:15 eastern time to go through the numbers with us. we'll be right back. s our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."
welcome back to "squawk box." very early, 6:19 eastern time on the east coast. futures, a bit of a mixed bag. as becky said at the top of the show, tuesdays have been the best day for the stock market this year. >> i had no ideas that tuesdays were the best day going in. >> what is it, 14 or 15 tuesday is in a row we've been higher? >> 14. >> 14 in a row. right now, futures not indicating that's the case, but hey, we've got a long way to go and a lot of earnings to get through before that. terrible tuesdays no more. >> i think these trends are pointing out and then we jink then. that's what we've heard back from people. maybe we'll zip our lips. >> you just in your very nice way told me to shut up. >> i know. sorry. >> which is perfectly acceptable. >> i brought it up first. so you can blame me. >> in my head and i'm telling my own self to shut up, as well.
radio shack, the company has had just -- if you can bring up a five-year stock chart of radio shack. do you want to see the definition of ugly? that has been an absolute disaster of a company. radio shack, sort of like its nearby neighbor in texas, jcpenney, look at that chart, folks. >> wow. >> yeah. >> one wonders -- 20s all the way down. >> when and how radio shack lifts itself out of that. >> in the meantime, let's get to the national forecast with eric fisher. eric. >> good morning. another winter storm on the map today. the damage for a lot already done. you can see the current snowfall there. anywhere from duluth over towards the u.p. of michigan. they probably just plug their ears at this point and say i don't even want to hear it. i don't want to look out the window. in duluth, they've had 50.2 inches of snow now this april. that is now the snowiest month ever recorded. records there go back to 1870.
that will tell you how rough this month has been. and this cold map, i can tell you this was mid january and you would believe me. it feels like 3 in rapid city. 10 in dodd city. kansas city will switch over to snow soon. lots of record lows this morning. on the leading edge of all that, we've got the rain and places that are flooding around chicago, down into missouri. heavy rain now moving towards st. louis. this is all going to be tracking its way off towards the north and the east across where all those rivers are running very high. flooding will remain a concern. flood warnings from michigan down to northeastern arkansas. a couple rivers still have to crest parts of the mississippi and the illinois river, what this additional rain will do is keep the water levels very high. a lot of on standing water today. probably not a flash flood theft, but there will be road closures. another 1 to 2 inches in grand rapids. there's still major flooding downtown. 2 to 3 in indianapolis. then we move to the northeast. we're just missing an ocean
storm. it's creeping its way up the coastline. up towards eastern long island, boston area providence. it's going to be an ugly day. rain moving into the cape right now. strong easterly winds. you see the direction there. this time of year, the ocean is very cold. from boston down towards providence and new port chatham in new york city, same in the 40s and 50s today. not feeling so much like spring. guys, there are changes ahead. as we look towards this weekend, things will finally start to warm up for a lot of people. >> promises, promises. we've heard that before. >> thank you, eric. you know those weather guys, they just throw stuff out there. you can never trust them. >> we've been waiting and waiting and waiting for spring. i'm just a little eager. that's all. >> it's understandable, okay. >> by the way, that weather forecasts are one of the best forecasts around. meteorology of all the things forecast, stock markets, people forecast all sorts of things, weathermen, even though we give people like eric a hard time sometimes, get it right much more than others. >> a a lot of arm chair weather
men. i look out on the window and it's not what you told me just now. that's the problem. we do give people a hard time. is true. it's earth week and what better way to celebrate our green is universal with green beer. we mean beer production that goes easy on the environment. it's an interesting story and iex breaking right here squawk this morning. miller coor's is reporting that its famous golden colorado brewery, the largest single site brewery on the planet is now weeks away from becoming a zero waste site. what does that moon exactly? more than 99% of brewery waste, glass, plastic, even spent grain gets reused or recycled. interesting story behind this initiative, the idea came from a long time employee, a shop floor technician there with the initial plan to get the company's major breweries to zero waste. for much more on earth week and this story and others, check out
6:25am kind of an interesting feel good -- and it has to do with beer and drinking. >> i didn't know this. jane wells and tom rotuna on the on assignment desk are doing this whole thing called brew and chew. >> i read about this, too. it's going the be online. >> on it's all about beer news, food news. jane wells, i saw her in california two weeks ago. she said she promises a heavy dose of bacon news in this, as well. they have a twitter account and it's going to be online. it's kind of cool. beer and bake job in the morning. >> jane is a jack-of-all-trades. she can do anything. >> i don't know what the -- just search for it. it's somewhere up there. >> by the way, anthony weiner, just channel my joe kernen this morning, he just got a new twitter account. >> i saw that. >> you saw that? >> i did see this. >> so he's back on twitter. may be dangerous, but he's back. >> i think we have a new twitter account right now.
>> what is that? >> inner jk joe kernen. >> i like that. >> the hair has it already. it's not him, but it channels him, as well. >> he has a few out there. i've got sully's ears, but it hasn't gained much traction. >> after three hours on this show, i promise you, there will be a lot more tweets on that one. let's get to the markets. we have tom higgins. also ed egalinski, managing director and head of alternative investment decisions at direction. tom, i want to start with you. you think we are getting to that point where we're looking at a mid year slowdown? >> yeah. i think if you look at the recent data, whether it be the pmi data out of the united states or the retail sales data, it looks like we're start to go slow down as we have over the last couple of years. we think it's primarily due to the sequestration and the tax hikes we saw earlier this year finally starting to take a bite out of the consumer.
>> yesterday we talked to the caterpillar ceo and he pointed out i thinks we're not going to get the same dramatic swoon we've seen in the past. he doesn't see it being nearly as drastic as it has been the last three years. what do you think? >> let's put it into perspective. we think the first quarter was somewhere around 2.5%. we think the second quarter will be 1% to 1.5%. i think the market will view that as a significant slowdown. it's not a recession, but certainly a meaningful pullback in growth. >> one of the other things you point out is that companies are going to have a much tougher time trying to keep up with the profit margins like they've been experiencing for the last night quarters or so. >> yeah. and if you look at the initial reports for the first quarter, with about 20% of the firms reporting is that 35 mers are beating on revenue. that's a bit of a slowdown from the fourth quarter where you saw
over 60% beating on revenue. so that concerns us and with the slowdown this growth, we think that that is going to exacerbate that. >> so, ed, when you start looking around at place toes invest, what do you tell investors? are there sectors you think are better off than others? >> well, certainly. if we go through a global slowdown, it supports alternative investment strategies that don't correlate the stocks and bonds, areas like managed futures for example that can take advantage of price trends regardless of direction, also areas like currencies and enhanced commodity strategies, despite the fact that commodities as a whole have declined over the last couple of months. there are some commodities that have been bright spots this year, such as cotton and natural gas. >> go ahead, brian. >> ed, you know, some of the direct products you guy can use three times bear, three times pull with, people can make extreme betts on market moves one way or the other. based on volume, what are your clients now betting on with regard to the overall stock market?
>> well, we have two business lines of direction. i'm responsible for a buy and hold strategy that include alternative investments. we also, as you know, have our tradeable vehicles that if a client has an opinion on the market, they can trade either side of it. i think we have the commonalities come in is that leverage and shorting and the use of derivatives are something that you need to execute alternative strategies, as well. so in terms of wa we're seeing right now, it really depends on the day in terms of what clients think. of the markets. >> if we had to sum it up over the last months, would you say your clients are more bullish or bearish? >> they continue to be more bullish. >> tom, when you, again, take a look around as what's happening with the economy, wa do you think are the most important numbers that can give us an indication of just how deep this slowdown that you think is coming is? >> well, what we're tracking right now are high frequency indicators, things like jobless claims. if the labor market starts to deteriorate in here, last month
we got a soft number in terms of nonfarm payrolls. but if it starts to be something more persistent in terms of a labor market deteriorate and that starts to hit wage growth, then you add that to the tax hikes, you could see a meaningful pullback in consumer spending and that would concern us a bit more about the profit for corporations. >> could lower gas prices act as a hedge to those higher taxes that have hit consumers? >> oh, i absolutely agree. and i think that's actually one of the reasons we're not more pessimistic heading into the middle of this year. >> tom, ed, gentlemen, thank you for joining us. >> thank you. >> thank you. coming up, we are going to get a taste of apple. one analyst's opinion on what we're going to be allergy later from the company after the market today. and then later this morning, we're going to be brainstorming the future with two squawk disrupters. google executive chairman eric schmidt and ericco sn going to join us at 8:45 here eastern time.
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welcome back to "squawk box." this morning, the stock to watch today is the one everyone is talking about, apple. can we get away from apple ever? never. the company will be reporting results after the bell. dan, good morning to you. >> good morning, andrew. >> so help us here. let's go through the upside, the down side and what you want to hear. wa do you want to hear on this call today? >> i want my cash. i want my cash. i want a company that realizes they have my client's money and can give it back to them. and i think that the guide kwans for the second quarter will be pretty conservative, pretty low. we're at $7. that's well below consensus. and i still think the share
valuation is attractive, even with lower earnings. but i think if they don't show that they're responsible with the cash and try to protect e n earnings a bit, then there can be some disappointment. >> so the stock is just now trading under $400. if we had this conversation tomorrow morning at 9:30, where do you think the upside and the downside for the stock should be? >> we just put out a piece talking about upside, down side. we have down sided around 3.40, up sided around -- >> 340? >>s side over 600 if they do things right. and our target is right in between that, which is still higher. but we do acknowledge that the guidance for the second quarter will need to be lowered vis-a-vis the street. i think that what you want to see is gross margin outlook above 35%, even maybe 36% because that kind of dick tads the real earnings party going forward, even at lower revenue
levels. >> tell me if i'm framing up the issue right. apple has two audiences here. they have a real audience, which is the consumer and then they have the market. right now, even just the way their product pore followo is set up and their schedule, they're sort of in a tough place. what you would want to hear on a call like this is we have this coming occupy, we have that coming out, but they're not in a position to do that. am i thinking about this wrong? >> well, no. their new products all look like they're hitting in the third quarter, calendar quarter and they don't want to pause for the second quarter which is coming up which is going to have the lower guidance in our opinion. but this company has a stock that's linked to the brand. and what we want to see is tim cook be firmly in control. you've probably -- there's been a lot of controversy now around the company in a very short period of time. you want to see that they have control, that they stop the bleeding in the stock and that they can start taking control of the narrative in their company which they've lost.
>> but that's not around all these other issues, right? that's about coming out with some whiz bang thing where people go, you know what? steve jobs may have passed away, but these guys can keep going, right? and that's what we're really talking about. >> well, i think they need to show they're in control of the management. then they have to be very excited about their new products and be so excited they may give us some cash and feel like their stock is at an attractive price and be upbeat about the future while acknowledging that we're in a transition period. i think that they need to be also creative about, like i said, taking control of the narrative. the media, the analysts, just too much speculation right now. we need to see a management team that's firmly in control of their destiny tonight and that really is going to be the wild card that maybe dictates some of the after hours price action. >> hey, ben, could the silver lining in apple be the fact that the expectations are so low? >> oh, yeah. the expectations are low. they're way lower than the street is publishing.
i think if they guide to over $7 for the june quarter, there might be some relief, depending on how they sound about other things. and if they can talk at all about how they view margins over the long-term or cash, there might be some positive surprises in there. but, yeah, expectations are very low. the buy side is way lower than the street. there's a lot of folks we talk to that wonder if the earnings power ever gets over $40 again and the street is way above that. >> ben, we have to run, but you keep talking about cash, about management controlling the narrative and i keep thinking the only way to control the narrative is to come up with a product that controls the market. isn't that the problem, that there is no new sense that there's going to be a product that they're going to develop that's going to change the narrative again? >> well, that's a great point. you have to speak with your products. but they don't really have that much to talk about for the june quarter, but i think a lot is coming. i think that the iphone 5s is going to be accompanied with some software features. what they need to do is they need to make a splash in mobile
payments or update the software as such, like how we felt, even though we have now that siri might not be as good as we thought a couple years ago, when they first announced that, that buzz around the company is pal.ble. we need that again. hopefully this summer will at least tell us that those kind of things are in their hands at some point in the future. again. >> ben, thank you for your analysis this morning want we'll see how things wind up this afternoon. i imagine we'll continue this conversation. >> thanks a lot. >> thanks for joining us this morning. it is now time to be, then. you can become part of this apple conversation and be our arm chair analyst. will apple meet, beat or miss earnings estimates? wall street expectations moved lower overnight to $10.07 a share. when we started the estimates, the poll estimates.were $10.07. so we're still baiting it on $10.07.
and you can vote on our arm chair analyst poll and you can do that on you will also hear from yumm brands. we want to get a focus into china, what's happening with them. that's the big one. live report on what to expect from yum and what to expect in their kfc problems in their fastest growth market. we'll take you to beijing, next. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪
welcome back to "squawk box" this morning. u.s. equity futures at this hour, we have some red arrows, but it's marginal.
nasdaq up almost 2 points, as well, and the s&p 500 off about a point and a half. let's get you through some of the news this morning. a big one being an internet sales tax big is just cleared a procedural hurdle in the senate yesterday. the legislation would give states the authority to require out of state retailers to collect sales tax for online purchases. the bill is opposed by many online retailers. a full senate vote is next, but the bigger obstacle to the effort is in the house where many republicans see it as a new tax. and many times becky quick is the expert on this topic. >> you have a column on this today. >> i wrote about it today, but you are the expert. >> i'm going to call you the expert for now on. >> she's been calling this is am zone loophole this morning and i renamed it the ebay loophole because amazon has given up this fight because they have built so many facilities they have to pay the tax, anyway. but ebay is still out there.
>> i meant to go back yesterday and look back how it would impact -- >> so right now, the deal is if you have $1 million in owes of state revenue, you don't pay. >> right. >> everything above that. ebay is saying, that's not good enough. the number, the threshold should be $10 million out of state. the argument is database the compliance is high, which i don't buy, by the way, because amazon can collect it for you. ebay will find a way to collect it for you right now if you ask them to. >> ebay could do this for their sellers. >> the bigger argument is about enforcement. they say, look, if you're in nevada and you're selling to pennsylvania and all of a sudden the folks in pennsylvania say we want to audit you, what's the cost of actually dealing with them? i don't know if you think that's a reasonable argument, but that's sort of the enforcement argument is what they think the ultimate burden is. >> i'm sure there are stores
that, you know, sell less than $1 million in revenue on maul main street that would like to be emt exempted, as well. >> i was thinking about this the other day because i ordered something online, shoes for my kid, right? and the box wasn't very big. but it came in this giant box filled with white styrofoam pellets. the thing was a nightmare .i'm never going to order from that company because because of that. but i thought the other costs, the recycling for the box, wa do i do with the styrofoam pellets. there are other costs that i was thinking of and i had these white styrofoam pellets all over my body because they were so static. >> recycling is a big one. >> so not only giving a break on the taxes, on the on other side, they're costing more money with what -- the junk that i'm leaving on the street. >> it's funny that you see that because i wrote this column and -- >> is it funny? >> no.
a wrote this column and a couple of people are already commenting -- >> it is green week, but nbc universal, by the way. >> what i was going to say is there are some merchants who say i don't get any benefit. if i'm based in new york and i'm selling to pennsylvania, i don't get any benefit from pennsylvania. but, in fact, what you just said makes a lot of sense. you do, all the shipping, whatever is involved with disposal of all -- >> and a lot of refuse is going to go to another state. new york ships its trash outside of new york. new jersey does the same thing. new jersey we all know is full. >> scott -- >> wait a second. you live in new jersey, too. that's the only reason i'll let you go ahead away with that. why don't we talk about another story brian was mentioning before. yum brand is out with quarterly results. once again, china is the key to this story. eunice yoon joins us from beijing. we're going to watch this incredibly closely because of all the issues they've had with poultry there. >> that's right. they have a lot of issues
because of antibiotic scares so people have been shying away from their products. but also, wa people are worried about is going to be, you know, really hitting yum brands today is the fact that the bird flu scare has just gotten so big. there's just so much uncertainty about bird flu now. we have no idea how this disease is being spread. we also know that the mortality rate is really high. it's at 20%. so because of that, people are really scared here and a lot of people have stopped eating chicken. the poultry industry said they've lost $3 billion since the outbreak and also restaurants, too, have said that they've seen their business drop by 15% for the most part. and a lot of that is not only because they say that, okay, we actually realize that it could be true that chicken is safe to eat, but we just don't want our servers to be handling all those dead birds. so the mentality here right now is better to be safe than sorry. >> situations like this before, do you recall what happened the last time around?
how long it took to recovery after we got through the avian flu? >> well, with avian flu, it took quite some time. but a lot of people have been comparing the numbers for avian flu a couple of years ago and now saying that what's kind of scary about this particular strain is the fact that we've seen more people infected in the past two months than we've seen with the previous strain over the past decade. so what people are talking about is just that this particular strain of bird flu is much more mysterious. the fact that, you know, the authorities here have said that there isn't any evidence for sustained human to human transmission, but that there could be lilted human to human transmission. and is what they mean by that is they could see that it's potentially passing between people in close quarters, but not casually. like you wouldn't be able to get it if you were on the subway in the same way that people catch a cold. but at the same time, that's a
bit of a mystery. and another thing scaring people is a lot of the people who have been getting sick have actually not shown symptoms and it's the same with the birds, that they actually don't show symptoms, even though they have the illness. so that's making people nervous because it's much more difficult to detect. >> to detect. >> thank you, eunice, from beijing. >> brian, you will take a trip to us with the chairs. you have some gossip ready to go? >> the chairs. >> we're going over here talking anthony weiner, reese witherspoon. any kind of gossip you want to share with our audience. the full "squawk" experience. >> in the next hour, cue the band. here comes the earnings parade. travelers in united technologies. the numbers, instant analysis and hopefully, brian, we'll have pants. all of that right after the
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>> welcome back, everybody. we are in the chairs. yes, brian has put his pants on. we are watching for s.e.c. adas to hit the east coast. they are due to hit in big
numbers this year. national geographic had a story out this morning that talked about why they come out on 13-or 17-year cycles. >> i haven't spent much time. >> soil ph? >> it's in their dna. this is the survival of the fittest. the one withes that came out every year or two years, would get eaten. they know they have a better chance at prime numbers. >> if you're that week of a creature that you can only come out every 17 years. >> i love them. >> why exist at all? >> they live underneath on tree roots. so they're not actually dormant.
>> i'm getting my motorcycle license. this is not a good time to be on a motorcycle. >> smile big? right in the teeth. >> why are you getting a motorcycle? are you out of your mind? >> i already own a two-wheeler. i'm just getting my license. >> i hope you have a helmet? >> not at all. of course i have a helmet! >> okay, good. >> all right. when we come back, quarterly results from two dow components. i know what you're thinking...
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trains, planes and apple. earnings parade and it kicks off now on "squawk box". what may be the most important earnings announcement for apple in years. a disrupt tore who wants to keep you warm and save you money. the first learning thunderstorm stat. >> and we are kicking off a special cnbc event with the queen of real estate. the second hour of "squawk box" begins right now. good morning and welcome about "squawk box" here on cnbc. i'm with becky quick and brian sullivan in for joe kernen.
take a quick look and see how things are setting itself up. dow up 13. s&p up marginally. >> we have some earnings. travelers, dow component out with numbers. 233 versus 202 that the street had been expecting. that is a significant beat. and how their written rate gains exceed in all segments. the renewal of 8% includes nearly 10% in commercial accounts as well. book value per share, $68. that's up 7% from the prior year quarter and 1% from the year end of 2012. comments from jay fishman, chairman and c can eo, say these are the highest operating until per share since public offering. renewal pricing exceeded lost cause trends and retentions remain stable. so, again, after you see some
catastrophic events insurers can charge more for some of those premiums. at this point they continue to see renewal price exceeding lost cost trends. >> 139 versus 1.29. so the beat of a dime. sales $14.4 billion, up 16% year over year. it sees full year, 585 to 615, a big range for utx. guys, we always focus on different indicators, right? i know business insider henry blodgett has all these indicators. chinese elevator indicator. otis of utx, sales up 24% worldwide. right here on "squawk box" as a fill-in anchor, the chinese elevator index remains strong.
the ghost cities, you can get up and down 50 and 0 nice and quick. >> we heard yesterday from caterpillar's ceo. it will be huge what's happening in china. honestly. we will talk to ellen from dupont and see what she is seeing in that. >> it's their version of "field of dreams." if you build it they will move in. >> how do you feel about all the new elevators where you press the button on the outside? >> what? >> you don't know what i'm talking about? >> i don't live in a penthouse in the sky. i'm not moving on up. >> you have to say where you're going. you don't know what i'm talking about? >> i don't. >> we have to get you in new york city. nbc has this. "30 rock". those were originally field
tested at "30 rock" where nbc is. now otis is doing them everywhere. >> caye niece elevator indicator. >> i like that. >> we have to get you caught up on the morning headlines. good news for apple. trade commission judges agreed with apple's argument that a patent he held by motorola is in valid. it involved sensors that disabled touch inputs. google is evaluating its options. eric submit in the 8:00 hour. the national transportation safety board begins a two-day hearing looking into how boeing 787 battery system was approved. the jet of course was taken out of service after problems developed. they approved a redesign of those batteries. they might have some in the air maybe even later this week.
who is putting small knives and bats on planes? i'm glad it was delayed. >> baseball players. >> i didn't realize it would have gone into effect this week. it will allow feedback from a variety of agencies, though it did not say how long that delay would be. bats and knives. considering i'm taking my shoes off and doing all sorts of other nonsense. >> seems like a crazy idea. particularly this next story as well. a terrorist plot to derail a new york train has been derailed. charges including conspireing to care out an attack and murder people in association with a terrorist group. they were arrested as part of a cross border operation with u.s. officials. the rcmp says the attack was in the planning stage but not
imminent and not related to the bombings in boston. this was pretty horrific things they were planning. they planned eventually to blow up a train as it was crossing over niagara falls and looking to do a passenger train pause they were hoping for a lot of carna carnage. >> that's a shame. that's the one form of transportation that's still relatively easy in the united states. they're going to nitpick on every aspect of our life. and you can't let them win. let's check on other markets. oil is something we all care about when we fill up our gas tank. it has been going down ream. we're down 70 cents a barrel to 88.50. gasoline price coming down with it. focus on the 10-year dollar and gold. 10-year treasury moving up the yield 1.66%. if you take a look at the dollar. and dollar/yen surpassed
euro/dollar. we're at 98.66 right now. continue to watch that. the japanese stock market has been the number one developed stock market in the world this year. that was predicted in december by somebody on the set. just going to throw that out there. >> i am on the set right now. mentally that's to be debated. >> did you think it would be devalued? it was done against the dollar numbers. >> i used to work for a japanese bank a long time ago. exceptionally proud people. they will do whatever they can to save their economy. a level that would make our federal reserve look like amateurs. i'm saying it's going to work. it's written on cnbc.
nikkei has been soaring. 10,000 intended to be a floor for the nikkei. >> i have to tell you, it has impact elsewhere as well. today you have the german 10-year hitting a new low. the italian 120-year hitting a low. they're saying a lot of japanese nationals looking to buy bonds. so it's having an impact on the world, which is pretty positive. >> why not introduce you. >> sure. >> tom is the ceo of kbw. and chief of business insider. they're guest hosts. tom, you bring in really interesting points tell us what's been happening through earnings season. is business improving? >> so the good news is banks have been hitting their estimates. we have a quarter of the industry report. a few more coming out today. it's really all about the
outlook. the outlook is getting a little more revenue perspective. we need the economy to help. the banks recovered from the crisis. near zero interest rates. and we need more corporate demand for loans. >> i looked at a piece from nine months ago. you were predicting in 2013 and 2014 we would be seeing a better environment. it has been so rough for such a long time. 2012 was a correction year for the banks. as an example, we had bank of america shares double. so what happened. i think what happened is the psychology about the company has changed. and i think the market was ready to put the prices behind the industry. we have credit quality improving every three years. so the industry is in great shape. we're turning the chapter as to what's next. so the outlook is solid.
banks will still grow earnings in the high mid single digit basis fort quarter. it will be deceleratindecelerat. >> 2% gdp is not cutting it. the banking industry was not built to have near zero interest rates. as the assets roll off and are getting replaced much lower levels, it's going to continue to be a grind. earnings are still going to grow, just at a decelerating rate. >> everyone needs help from the economy. one of the problems is everybody is trying to basically fire and cost cut their way to prosperity. >> yeah. what is it in the banking sector that will get the banks to make shiitely more speculative loans.
>> i have to tell you the reports that read a trillion dollars of cash. and teverybody is cautious. >> demand problem. >> it's the banks. >> the point is the demand problem is because every company in the economy is trying to grow earnings by cutting costs and firing people. you need to pay people to create the tkphapd. demand. >> bimgo. you must watch street signs. we led our show with this yesterday. i'm going to sound a little bit off the rails here. >> for the first time. >> for the second time today already. until shareholders begin to reward companies that reinvent and do the right thing versus cutting. cutting jobs, pay, benefits.
>> it's a chicken and egg skin narrow. corporate margins are the highest in history. >> corporate profits. >> that's your problem right there. >> until the investors says i'm going to reward the company. henry ford knew. he was a whacko. if you don't pay somebody a good wage we're going to become your consumer. >> he was doing what he was doing effectively. it wasn't a global world. the reason he was paying his people is he wanted to spur demand. if you're in detroit and you pay your people or in the
electronics business that doesn't spur demand in europe or in south america or -- it's supply and demand. >> i'm talking about the united states. until corporate america realizes that this gap which is diffusing stock into the everyday market. >> we live in a global economy now. >> let me put it slightly differently. this will will fire up the hate mail. we have come to where a shareholder is everything. we think about companies creating value. a great company creates three sources of value. wonderful products for consumers. a great living and life for employees and good return. we have swung the pendulum all the way over here. >> you're not talking about
america companies. you're talking about them chipping away at the edges. >> you have companies like walmart. fantastic company. not to pick on walmart. full time people who work there all their waking lives are poor. yet walmart prints 25 billion of operating every year. >> same argument for the university system. it's the same thing. top 10 universities have over $100 billion in their endowments, yet tuition continues to go up. who are they in the game for? >> i have heard people rail against employees. if i'm opposed to this, because i have had arguments in my family about this, why do you continue to go there? >> what are your options? >> we're cultural cheap in this
country. >> we want it on both ends. >> i'll pay 100 bucks for a pair of shoes. some people pay $30 every year. >> this is a chicken and egg situation. get back into the sick cal arguments. what's wrong? how do you break that? >> you're talking about breaking two cycles. the shareholder cycle, give the middle finger to wall street. >> we grow our way. they can be shareholders too. >>. >> can somebody bring us an american flag on set right now? we need a ford not built down in
the jungles of brazil but right here in america. >> all right. still to come this morning, apple is really bruised so far in 2013. that could change when the company reports results after the bell today. we'll talk about what's next for apple and what it's going to take to turn that stock back around. the american dream is of a better future, a confident retirement. those dreams have taken a beating lately. but no way we're going to let them die. ♪ ameriprise advisors can help keep your dreams alive like they helped millions of others. by listening. planning. working one on one. that's what ameriprise financial does. and that's what they can do with you. that's how ameriprise puts more within reach. ♪
welcome back to "squawk box" this morning. a quick check on the futures and see how things are setting up. getting a little bit better as the show has progress said here. dow opened 40 points higher. s&p up a point and a half. nasdaq up five points. quarterly results due after the "closing bell". joining us to get to the core -- i have to say core. abigail doolittle. do you have a core? what are other things we can use? >> just use it once a day. >> abigail, what should we
expect today? >> i think tonight's earnings report will be similar to the last three the company has put up. those have been funky numbers. the last was q12012. i think he need to see iphone 23 and $25 billion. most important is to see where it fits within the downward negative trend of those funky quarters. i think it's unlikely to be a true reversal. there is a crazy spike up to 425, 455. medium turn drop down towards 350. >> let's just repeat that. 321 is the down side? >> i think we see apple bottom out around 3.21 in 2013.
and i think what that reflects, the bigger picture after this 40% fall from grace, will we see this turn into a nokia, a microsoft, or an apple part 3? i think it's a microsoft. i think we're looking at a high growth company maturing into a more mature company. they are modeled less than 15%. >> we have had people say the stock was cheap at $7, 5, 4. >> it is undeniable cheap nine times trailing. you can make the argument that it's not so cheap. nokia, 3.4. microsoft 3.4. >> abigail, i'm not defending the the stock. it's trading 11 times earnings.
price to earnings and price to sales basis. 14% growth expected this year. and stock 700. 700 should have never been accomplished in the first place. >> it was spiking up parabolically. it must correct. we have seen that. now it's just a party of seeing the stock bottom out. technically my work would suggest 3.20, 3.15. aspectations really fall into a reasonable line. and this company lost its cool factor, it factor. it takes time. this is a big ship that's being turned. it's just going to take a couple more before we see the company find a true bottom. >> just to clarify, 3.21 is
worse case scenario for you. >> actually, no. the stock chart. again, i'm a technical -- my expertise is technical analysis. i think the next big level of support where buyers step in historically and support the stock -- >> is this assuming they have no now products ever? just so i understand what we're talking about. >> it's impossible to predict the future. this company has a great track record. could an itv? yes, maybe. we have to focus on the iphone, ipad. >> just hold on one second. >> sure. >> you're listening to this. you're making faces. >> how do you get to 3.21?
it's a very precise number. it might go longer. are we drawing lines and angles? >> we could round that out a little bit. between 300 and 350. long-term support is precisely 3.21. that's why i throw that number out there. from a valuation perspective, it suggests that numbers are actually going to come in just a little bit more unless, you know -- >> i agree with that. i think they're going to get cr numbers. >> i apologize. we have to wrap up. we will continue this conversation. abigail, thank you for your perspective this morning go to facebook and vote today, play armchair analyst. will apple meet, beat or miss the expectations? >> are we allowed to vote. is this where employees and friends and family are not allowed to vote? because i have a conspiracy theory in regards to numbers.
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comments, questions about anything you see here on this show? e-mail us or follow us on twitter. up next, we'll kick off a special series happening all day at cnbc. it is called million dollar home matchup. real estate queen dolly is here to kick things off. as we head to break, though, a look at futures. a little bit higher. will we make it, guys? 15 straight tuesdays where the dow has gained. >> you're jinxing it. >> there's no way in heck we will rise today. where there is o to match my every mood. ♪ where just one touch creates the perfect coffee. where every cappuccino and latte is made at home. and where i can have exactly what i desire.
♪ nespresso. what else?
welcome back, everybody. let's look at the dow components. they were in the red but now they are much stronger because of what we heard from dupont. 1.56, four cents better than the
street was expecting. chief executive officer ellen kullman will join us to talk about the quarter. more coming up in just a little bit. travelers earning 2.31 a share for the first quarter. you strip out two cents of investment gains that was well above the street's estimate. travelers actually benefited from rising rates and decline in natural disaster claims believe it or not in the wake of sandy. night that stock is also up 37 cents. >> all day today on cnbc we are showing you what $1 million can buy you across the country. we sent six reporters, which is pretty much all of them, to six different real estate markets to check out a million dollar home.
we have super broker dolly with us to crown the top house. thank you very much for joining us, dolly. >> thank you for having me. >> hasn't sold anything in that range. >> it's like a billion dollar home.
perfect for a doctor, dentist, of private yoga studio. >> this certificates with lake access, mature landscaping, hot tub and three-car garage. it is known as a painted lady. >> 7,400 square feet. the kitchen also very large. st. charles design with lots of light and windows. and the great center island and stairwell that leads up through the the back. >> this wide open floor plan has
a renovated basement, sustained glass, five fireplaces right here in the kitchen. >> it has eight bedrooms and six and a half bathrooms. and the master, once you go through the bathroom, has an additional sitting room with one of five fireplaces in the house. >> stained glass follows you up the main staircase, a very rich history. you can almost feel it in the master bedroom because this house was once a brothel. >> the house takes advantage of all this beautiful greenery with this raised patio which can be covered in the summertime. and in the wintertime from this dining room you still get a great view out the picture window. >> the owner is an expert in stress management which you can tell. a desert oasis complete with quadruple jet steam shower. asking price, 985,000. >> round one, very interesting.
one hand, you have the painted lady. on the other, colonial. very different homes. >> i like this game. >> is this the point where we guess where these homes are? >> i want to guess based on the reporters. the old colonial is in connecticut. painted lady is in maryland. >> i say connecticut for the colonial and virginia for the painted lady. >> i'm going virginia too. i like virginia. and i like connecticut. i don't know. >> westchester. but i think i'm wrong. >> new jersey on the colonial and san francisco for the painted lady. >> rhode island on the colonial and virginia. >> wow. great guesses. across the board. isn't that interesting that it's hard to know. >> are we all wrong? >> no. connecticut is correct. >> the old colonial.
>> correct. connecticut is correct for the old colonial. it is new haven, connecticut, home of yale. so beautiful house, big comfortable house. now, how about the other house. everyone is wrong about the other house. how about this. it's near the windy city. >> chicago. >> bing, bing, bing. >> you know what the giveaway should have been? snow. >> illinois the only state where it snows. >> and it's coming again i hear. >> where is the other one? >> sort of the mob, '20s al capone stuff. dolly, probably the best real estate agent in the united states. if i had a million bucks, which
should i buy? >> which would you buy? >> painted lady. >> it's twice the square footage. >> it's tough. twice the square footage. >> i feel new haven is on the come back. >> agreed. it's not so far from new york. not so far from the metropolitan city. but i say the winner is chicago. >> you do? >> because it's so well done? >> everything in that area is a nice high-end home. ex home to michael jordan. there are a lot of players in that area. so it's really -- >> 20-minute community to downtown chicago versus 90 in manhattan. >> plus, the house is beautiful. i would even buy the furniture. and to me it's all about buying the house that's going to increase in value the quickest. and i think that's definitely chicago. >> dolly, you said something really interesting before we
came back, that you were surprised by how much you could get for a million. >> unbelievable. >> you didn't think it was possible. >> no. although it's four times the national average of home price. i guess we're jaded in new york. so we think a million dollars buys a studio. >> everyone has been talking about the recovery, which is very strong. what about your outlook nationally. are we going to continue on this? >> we still have a few bumps in the road, employment question. if you don't have employment, you're not going to have demand, organic demand. >> going back to what we were talking about earlier. >> it's like real estate porn when you hear about these $100 million places for sale. still going strong? >> it's going strong but taking a bit of a pause. it's going strong. >> foreign buyers who are hesitating? >> i think almost everybody is hesitating, right?
china is saying, gee, my stuff is not doing so well. i think everything is hesitating a bit. >> according to dolly, painted lady in highland park, illinois takes number one. the old colonial, eh, out. painted lady will go head to head with another million dollar home in another mystery location. in the 10:00 hour of "squawk on the street", dolly will move on that $1 million home up against the the painted lady and tell you what is the better value. later on on cnbc, "closing bell" with maria batter roma and 2:00 p.m. eastern time. >> yes. >> great host of that show. >> are you familiar? >> familiar. >> check out dolly tips on buying a million dollar home go to squawk
>> nest is a new smart thermostat backed by google ventures. anyone have one yet you're getting one. and eric schmidt is going to join us to discuss his new book and the future of technology. changing the world is exhausting business.
with the innovating and the transforming and the revolutionizing. it's enough to make you forget that you're flying five hundred miles an hour on a chair that just became a bed. you see, we're doing some changing of our own. ah, we can talk about it later. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving.
welcome back, everyone. in our headlines, a car bomb hit the french embassy in libya. two french guards were injured and there was extensive damage. this is the first attack on a foreign mission since they stormed benghazi back in september. okay. we want to save the environment. everybody wants to save the environment. up to 20% of your energy bills at the same time. here's the opportunity. try the world's first learning
thermostat. for those who don't know about nest this is one of the very cool products out there. you say you're about to buy one. >> yeah. i like the fact that it learns. it knows what your tendencies are. it's 70 degrees. it goes to 63 at night. you don't have to mess with it. it's less work. >> you're teaming up with energy companies. >> what is learning thermostat? what we do is we watch your patterns. you just turn it up at night, turn it down to when you go to work and what have you. through those patterns, after three or four days, we have learned your schedule. and we program it. so you don't have to program the thermostat yourself. only 11% of the quarter billion thermostats are actually programmed to save any energy because they're too difficult to use. so we just learned based on the
adjustments. >> it learns by the temperature you put in. it might have a sensors and knows if you're in the house. >> that's an additional functionality. you can change the temperature on the dial or through your smartphone. we record that and play it back to you. >> you have told this independently. now you could go buy it at an apple skr. >> we have been partnered with reliant. it was an experiment with them. it's a dereg market. they have to track and retain their customers. they have to have unique services. so reliant brought a learning plan that bundles the nest so you sign up for two years and
get a free nest. >> how difficult is it to install? could i do this myself? >> over 90% of customers install it themselves in less than 30 minutes. >> what do i hook it up to? >> you take the old one off. >> there's generally a two-wire or six-wire format. >> you just lost me. >> you turn the power off. >> exactly. >> you have a feature on this thing that somehow you try to trick people a little bit into living with a slightly in a warmer world and maybe a shiitely colder world. >> right. if it's like one or two degrees i've i'm aware. >> that's not what we see. we have a little leaf that shows up.
what we find is 65% are looking for the leaf. they're very comfortable outside their normal bounds but they are saving 5% for every degree. >> your device works as a thermostat. you can control it from your iphone, wherever you are anywhere. >> right. >> is the future controlling all sorts of things in the home. >> right now it's just about heating and cooling. but we have a team really capable. we hope to go to other markets. right now it's all about thermostats. people are coming to the u.s. and canada, export to go 80 other cups. our first goal is to get to the other countries. >> so one of the reasons folks are so excited is you took this object that is everywhere, that nobody paid any attention to. then you brought an apple design sensibility. you made it look really cool. a nice glow to it. what are other things in the
house or anywhere else that you or somebody like you will do the same thing, bring that cool apple design aesthetic. we are seeing it now with the nespresso coffee machine. brilliant job of marketing and product design. it's been taking over. we're seeing that from all sort of kick starter products trying to look at different parts of the home. water, irrigation systems. you will see different products the next five years. it's going to become a reality. >> tony, this is not an earnings question. as a product guy, someone who followed apple and lived there, do you think that they have a third act in them? do you think there's going to be new, cool amazing products? or do you think whatever innovations happen, it's the new microsoft. >> i understand the team incredibly well. they're amazingly smart people. what people have to understand and shareholders too is that it
took five years. seven years to get it to market. then another three years from the ipad. they don't pop out of the oven every six months. you have time to figure it out. >> can your team hold together? >> absolutely. they're doing a great job. >> tony, thank you. >> thank you very much. when we come back, hedge fund managers at yankee stadium to play a little pitch and catch with investors. [ male announcer ] a car that can actually see like a human, using stereoscopic cameras. ♪ and even stop itself if it has to. ♪ the technology may be hard to imagine. but why you would want it... is not. the 2014 e-class. it doesn't just see the future. it is the future.
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welcome back, everybody. goldman sachs holding its symposium. it has chosen a unique location. mary thompson has the pregame. good morning, mary. >> good morning to you, becky. this is the second year this event has been held at yankee stadium. some of the biggest names in the hedge fund industry will be making their sales pitch to clients. they include the likes of pension funds and endowments. attracting some of the best and best known names in the hedge fund industry. among those expected to present today, sac steve cohen who owns a share of the mets. several employees charged with inside trader. cohen has not been charged. bill ackman now former jc
opiniony ron johnson. and boaz weinstein took over jpmorgan whale trade. he is presenting two clients. they are meeting in small groups throughout the day. goldman is sponsoring the each. they declined to comment. no word whether anyone will be taking batting practice. certainly it doesn't feel like baseball weather today. back to you. >> mary thompson at yankee stadium. bring us back hot dogs, mary. thank you very much. >> sure thing. >> final thoughts on the market? >> we're still bullish. we think there's a lot of opportunity here. >> banks or everything? >> well, first of all, the economy in general. housing turn is big.
growth is too slow. absolutely need to get a grand bargain. i think the bank stocks can do well. >> you mean back to the bull? >> yes. doesn't mean i can't ask for it. i have heard him say it's the most predictable that our policymakers have seen. it can be addressed. >> utx, we got earnings. they said it would affect annual earnings by 10 cents a share. >> this is an incremental approach. we need a 10-year plan that everyone can bank on. we need a 10-year plan so business leaders can make decisions.
we are well ahead of the rest of the world. all the capacity is there. we just need to let it looks. >> tom, thank you very much for coming in today. >> thank you, becky. >> still a very busy morning here on squawks box. a lot more to do on this tuesday. ceo of dupont. quarterly numbers out today. and eric schmidt serves as executive chairman of the company. coming out with a new book. we will talk about the new digital age and beyond. what is the future for technology? i know what you're thinking...
transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. let's say you pay your guy around 2% to manage your money. that's not much you think. except it's 2% every year. does that make a difference? search "cost of financial advisors" ouch. over time it really adds up. then go to e-trade and find out how much our advice costs. spoiler alert: it's low. really? yes, really. e-trade offers investment advice and guidance from dedicated, professional financial consultants.
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♪ nespresso. what else? dow component reporting. >> 1.56 versus 1.52. >> chairman and ceo will join us first on cnbc. >> google co-authoring a book on technology. >> apple will release quarterly numbers after the "closing bell". we're going to tell you what to expect when the tech giant reports. the third hour of "squawk box"
storts right now. welcome back to "squawk box" here on cnbc. first in business worldwide. joe is off. he will be back tomorrow. our guest host this morning is henry blogett. we'll hear from him in a minute. first, andrew has your headlines. >> quarterly numbers this morning. travelers earning $2.31 a share for the first quarter excluding two cents of investment gains. that was well above estimates of 2.02. united technologies earned 1.39 for the first quarter, 10 cents above estimates. companies saw increased sales to aerospace and defense customers during that quarter. dupont reporting 1.56 per share.
that was four cents higher than wall street estimates. chairman and ceo will be joining us in a few minutes to talk about all of that. among the other stories we're following this morning a car bomb hit the france embassy in libya today. two french guards were injured. there was extensive damage. this was the first attack on a foreign mission since militants stormed u.s. consulate in benghazi. >> u.s. equity futures have been indicated higher. came in looking at moderate red arrows. dow futures up 65 points above fair value. s&p up by better than four and a half points. overseas in asia overnight you did see a little bit of weakness. hang seng down 1%. and in europe right now, the trends there at least have been
following what we have seen here. in fact, the cac is up 2.5%. da x-up 1.6%. the markets have a healthy dose of earnings today. we have seen a lot of that. the market is attractively valued. but he says there are still shorter term technical concerns. joining us is john lynch at wells fargo bank. and guest host henry blogett, editor and chief of business insider. john, you're new to the table. tell us what you thought about earnings season so far. >> hey, becky, good morning. i think the earnings season right now potentially the second of third quarter we could be fractionally down. looks like a 1% gain in bottom line but also top line. we could be fractionally lower for the quarter. >> john, i would have agreed with you wholeheartedly before i saw some of the numbers from
today. all looked relatively strong. backed that up with caterpillar yesterday. that number was disappointing. >> that's very rewarding. i'm very pleased to see that. good numbers yesterday. also from the bigger manufacturers. that bodes well for global growth. imf last week. but if you see big conglomerates performing well. >> henry, break this down into different tech tors, though. tonight we get apple. that will go a long way for getting us a feel for technology. >> my question for john, corporations now have the highest profit margins. incredible profits as a result of that. really the last several years it's been driven by cost cutting. how long can that continue? when did the revenue growth really kick in?
>> that's the biggest concern. it's been bothering me a couple years now. again, with financials looking at 1% growth. but i think domestically at leave now that we have some clarity on capital gains, i think more and more businesses able to increase their spend to go help drive revenue growth forward. i think we're more apt to see revenue growth exceed that of nominal gdp. over the course of the next year i think well see that animal spirit return. >> what is this about goldman. >> they put out a call a week ago. they closed out that position this morning saying, hey, we made our, what, 10% in six days.
again, just tkpwhrapsing at some of the headlines. >> john, do you think this is the end of a 12-year bull market or not? >> you know, i'm not convinced. there was a perfect storm the last couple weeks. goldman call had a lot to do with it. industrial production and gdp. we have seen 300 stim active actions over the last 18, 20 minutes. bank of japan poised to make the fed blush. looking at all that. and all the geo-political uncertainty, i have to think there's a bid for gold at this levels. i don't know if we can get to 17 or 18. it will take 120 points just to
get to the moving day average. >> john, i don't want to get too wonky, but the japanese money typically goes into japanese bonds. >> right. >> now we are starting to see the money for printing go all the around the world. i'm a little surprised that the economic data that was weak overnight isn't more negatively impacting us. how important is that japanese money that's now starting to flood the world? what will do in a do to all boats, if anything. >> it's a huge lift. i thought it was interesting the g20 finally approved what the bank of japan was doing since the other g-19 countries were already doing it with the money printing if you will. it is going through a demographic shift. you had savings north of 20%. now they are approaching the 6% or 7% range. in an aging society that was
largely resistant that was more of a saving society, leaders were able to target a deflation ear trend. now it is down. they are not in big demand. it will be global stocks in my opinion. and consequently to your question, it will provide a significant lift going forward. but i want to make sure that lift has the foundation of corporate profits. and to henry's question earlier, we have to see top line growth as well. >> thank you for joining us. >> thank you very much. appreciate it. >> henry blogett will be with us as well. >> coming up, chairman and ceo of dupont. ellen kullman will with us next. and after the bell, all eyes will be on apple. will they meet? will they miss? will they match? we'll let you know what to expect when the tech giant
reports tonight. >> give us cash. >> give us cash, apple. oh, boy. [ groans ] ♪ ♪
[ engine revs ] ♪
welcome back to "squawk box". it's tuesday, which means the stock market has to go up. the reason i say that, and you guys are going to yell at me for this, we have been up -- >> oh, don't say it. you'll jinx it. >> are you guys into jinxes? >> yes. >> throw salt over your shoulder. everything will be fine. futures indicating a slight chance we could make it 15, jinx aside, people. get over it. >> if it doesn't work, it's brian's fault. >> fit fails today, send all your hate mail to andrew. sales of coach. they are soaring. they reported 84 cents per share for the first quarter, 4 cents above estimates. it raised to 1.35 per share and announced president and creator
director will not renew his contract when he retires. nothing better than when you leave and ratings soar. >> we're going to do our disruptor series. you might have to follow mayor bloomberg's footsteps and learn to write computer code. can you teach us how to do this? joining us is the co h-founder d ce on. one of the 50 best web sites of 2012. city of new york named him adventure fellow 2013. thank you for coming in. >> thanks for having me.
>> explain what code academy does. >> it's an easy way for people to learn to code online. getting started takes 30 seconds. >> and you invented this to teach yourself to code. >> exactly. >> the implications -- >> are we talking htmp? >> everything. >> dummies like me can go on and learn to code for real. and get a job as a result. you do offer the classes for free. i want to talk to you about the business part behind it as well. but the implication in an environment where we talk about unemployment in this country and the need to retrain people and find other avenues for business, this seems to be it. >> definitely. >> there's going to be a huge drought in computer programmers
by 2020. we hope to fill the gap by education. >> you're part of a lot of companies that are doing this. it should have a huge impact. we need more computer engineers. that's why all of silicon valley is focusing on the immigration issue. bring in more. the problem isn't that there isn't training. there's plenty of it. it's just it's not cool. nobody wants to grow up and learn how to code. do you agree with that? can you change that? >> definitely. i think we are on a way to that. >> how easy or hard is it? be 100% honest? how long will it take? >> it's super simple to get started but like anything
requires a lot of effort. >> so when people finish an intense i intensive course can they get a i job at apple, google? >> we're building on getting entry level jobs. >> milner, richard branson, perkins. those are big time vcs. what is the plan for code academy? >> a new online native experience for education. people can learn skills and help them find jobs. >> but they also want money. are you going public some day? you're a young guy. very successful. >> we're building a long-term business. whatever we can do to sustain a business. >> right now what's the revenue? >> right now there is none. >> if you're not going to charge
for classes, what other revenue models are you considering? >> building a product in the future. it's using the network. we have several million people learning and teaching people to add value. >> so is this more of a jobs board kind of company? something that connects people to finding each other from a jobs be perspective? >> that's definitely positive. that's something we will see in the coming year, yeah. >> when you think about other schools and the way the university and college systems works in this country, are people taking code academy? can you build your curriculum in other curriculums. >> this exists. we have people at brown, m.i.t. >> thank you for coming in this morning. really appreciate it. do you know how to code? >> i do not. >> you have a whole website.
>> what's the coolest thing you can build yourself? >> i think building the site was pretty cool. >> did you build an app? >> yeah. >> dream weaver from adobe, remember that? >> a little different. >> that's not coding. >> let me ask you one more question, what is the ideal background for someone wanting to learn to code. can a liberal arts, person. >> i was a science major. >> what side of brain, is it creative writing? >> it's everything. it's both math and the creative side of things. >> zach, thank you for coming in. really appreciate it. >> dupont chairman and ceo ellen kullman. and executive chairman of google and google ideas. the new digital age. they will join us in the next
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want to save on electricity? don't use it. live like they did long ago. or just turn off the lights when you leave a room. you can conserve energy wisely. the more you know. welcome back, everybody. dupont posting quarterly results. the chemical giant announced a 5% dividend increase. joining us is dupont chairman and ceo. thank you for being here today. >> it's great to be here, becky.
>> the street liked what it heard. i guess i would ask you when you look around at everything that's happening and trying to get a feel for what's happening around the globe, what's your sense of the economy right now. >> you know, i describe it as cautiously optimistic. we see areas of great strength like in agriculture. strong start to the brazilian season, latin america season. food and food ingredients still going well. industrial side, automotive had a slow start to the year. they're supposed to be up 2% for the year. we will see if it gets made up in the latter part of the year. there's uncertainty that i think is limiting on the industrial markets. >> what do you think is causing that uncertainty? >> well, i don't think there's been much change the last three to four months. we have sequestration. we have uncertainty around tax.
china's government is just now firmly in place and starting to take action. so i think that didn't allow things to progress on that side as well in the first quarter. >> in terms of china, we spoke yesterday with doug from caterpillar. he said in china things look a little better than they had to this point. what's your business in china look like? >> our business depends on the sector. things like nutrition and health food and agriculture, we're making great progress. automotive. in china, builds were up 12% year over year. in other areas that are infrastructure related, they have been lagging 6% to 9%. things about transformers or motors or generators. we see a lot of indication that's starting to loosen up and improve. >> i'm a nascar fan. i'm a jeff gordon fan.
he's my favorite driver. i'm starting to see your name a little bit less on the 24 car. which makes me think automotive paint not where you need to be. i'm surprised by that given the automotive industry has done so well. what's going on there? >> so we sold our coatings business in february. that is now not part of dupont. unfortunately we did sell jeff gordon along with it. that's why you are not seeing the oval on the hood. in our performance chemical sector made up of polymers and other chemicals. you have titanium dioxide that is cycling down, as expected. we talked about this in the last two quarters. we are seeing year over year decline. >> so jeff gordon sold by dupont
is your one headline. what can we discern from the weakness in that? >> so it goes into paint and classics and to a lesser degree into paper. it is know pacifier. it creates the weatherization and a lot of other products. it is sick cal. price goes up and down on capacity utilization. coming through last year, demand came off. utilization dropped. price started to fall in the second part of last year. we have seen volume stabilize. it was flat year over year but 8% over the fourth quarterment we will thinking it will stabilize and start to improve back to gdp growth rates thereafter. >> ellen, i know one of the strengths you had in the agriculture and in particular
you had things like seeds that are resistant to drought. i know that was important based on what we had seen in the last year at least in some of the major crops like corn. i was watching the weather report. they were talking about massive floods expected across much of the midwest. i wonder how some of those drought resistant seeds would perform if the environment is very different this year. >> so you're talking about our aquamex products p. we will have it on 7 million acres this year. it has a 9% yield advantage in water restricted areas. it had a 2% yield under general growing conditions. farmers still see an advantage. we had record results with sales up 14% and earnings up 13%. we're having a strong start. obviously weather is going to have a big impact how it all
plays out. >> one of the things we have been talking about is how in america, corporations have record profits. at this point it seems to be basically drive earnings by cost cutting. >> i think it does come down to the confidence we have in the economy. and this last year has been one where there has been a lot of uncertainty. part of that by our election and the changing government in china. and part of it uncertainty by what's going on in europe. as these things settle out. as china gets more secure in its path forward based on government change, as we continue to make progress in this country towards our issues, i think you will see that confidence build. industrial production only 1% in the first quarter. it's predicted to be 2.5% of the year. auto builds down 1% in the u.s.
i'm sorry. down 1% in the world in the first quarter. supposed to be up 2% for the year. so i think there's a belief that 2013 is going to strengthen with each quarter as we go through it. >> ellen, thank you very much for joining us today. >> great. it's a pleasure. thank you, becky. when we come back, apple trying to turn things around after a tough winter. up next, we will get a preview from analyst paul meeks. revolutionizing an industry can be a tough act to follow, but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business.
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welcome back to squawks box. delta air lines earning 10 cents per share. revenues essentially in line. us airways registered a beat. first quarter profit of 31 cents per share. both of these results are strong in what is usually a weak quarter for the industry. >> well above estimates of 2.04 cents. $11.3 billion beat analysts forecasts.
a cautionary note about the possible impact of the u.s. budget cuts. brian. >> apple set to report after the "closing bell" tonight. after a grim winter for the stock, what is apple really worth? it was north of 700. south of 400. joining us is an old friend of mine paul meeks, senior analyst for s.e.c. turna. great to see you. i miss new charleston, south carolina. now you're in seattle. >> great to see you. >> two ways to look at apple. it was at 700. fall down to 390 is unfair. stock is under valued. or it should have never been at 700 in the first place. what's the right answer? >> the right answer is i think even when it was 707 had a shot at going to $1,000 a share. i don't think it was particularly overvalued then. >> why? >> why? well, here's the situation.
here's a company that what we need to do is get through an event. everyone is talking about the earnings today. everybody knows that the street is expecting $42 billion in revenue. $10 per share in earnings. the problem is this. we have to lower the estimates to a reasonable level. it has nothing to do with a specific numerical change. the company will be recognized for its value. we will have product ramps late in cal a tkar 2013. the stock will get going again. >> great to see you. great that you say you like the stock at 700. everybody else you listen. it is going to crash at that point. do you think we'll get enough of the bad news in the stock tonight when they report? everyone is expecting a lousy quarter and worst guidance going forward. is it going to be bad enough we get the estimates low enough that the company can surprise on
the up side. >> that's the great question. i'm not so worried about what they say tonight about the quarter just passed. i'm worried about the june quarter. about $9 per share in earnings. i think the number is at risk. i think it could go lower. hopefully the analysts get their numbers down tomorrow morning where it can have this resurgence in the stock and all the bad news is out. so i do think there's a good chance, henry, this does happen overnight. >> paul, how much do you worry about apple trying to manage for the market rather than manage for the the consumer. they have gone through this period where now they are focusing -- i imagine if you're in the executive suite of apple is much on the stock price as the customer out there. >> well, i don't know if i would necessarily agree with that. they have always been focused on the customer and continue to be. here's a good example.
they pushed very, very hard for this preferred stock and increase in the dividend to the shareholders. the company had an opportune time at the shareholders meeting. here was an example where they saw extraordinary shareholder pressure and they didn't yield. >> what is your sense about new products? you talked later this year we will see new products. do you have a feeling that the products are going to be good enough, "game change"ing enough to reverse course here? >> i think they're going to be good enough. i think that the incemental delta between what apple used to produce and what somebody like samsung produces with the the galaxy has narrowed and will continue to narrow. however, i think the market is strong enough. i think they will have enough stretch stuff overtime, particularly at the second half of this calendar year that you will at least see the emerge
else of the story. at this valuation it doesn't have to be. >> picking up on andrew's point, the tension between the stock price and investing for the long term, a year ago everybody loved tim cook. said he was doing a fabulous job taking over steve jobs. now already people are talking about pressure on tim cook. is apple going to make a change? first, how much time does he have? will shareholders give him that time if apple has to reengineer and move forward here? >> i don't think he is under any threat. i think he's carrying out some of the strategies of his predecessor. of course after steve jobs's demise, you have a situation where people saying he's not as good, not as creative, not as in native. that may or may not be the case. but i think he's running a pretty tight ship. if he would still alive he would still face some of these criticisms. i think he's safe. >> paul, we don't talk about the
computer size much. iphones dom name here's my problem with apple in a sense. they seem to be cannibalizing themselves. i can get a 64 gig ipad for $699, throw in a $100 laptop and now i have a macbook air, and they tell for $999. so why buy the air? there's fear they may do this with phones a lot of people can't afford $400 so they come out with a cheaper one. >> i assume that's brian talking? >> yeah. >> yeah. >> who else would ask such a long question? >> and a good one. i think that is an important question. one of the disappointments in december 2012 was a significant drop in macs. the pc industry is in secular
design. i would not bet, at least on resurgence in apple stock price based on the mac business. >> paul, you have been watching the technology industry for a very long time. one of the things that has come up now, whether apple is in long-term secular design. we look at research in motion, dell. it actually takes time. as you look at apple, do you feel that's a realistic possibility that the company is actually going to, over the next five years, really deteriorate or do you think this is a blip? >> i think it's somewhere in between. the company's growth will clearly slow. and the inc kincremental pop. nokia in the 90s and blackberry more recently predominantly sold
hand sets. they are more diversified. they have a like in what i see is much more important in the number of hand sets sold. there they still have 75% of the market. to answer your question directly, 80s not a blip. it's not a secular decline. you will have some growth. boy, this stock should, over the next couple years, launch off the current spot at 400 bucks a share. >> you have gotten a lot more positive about apple lately. what did that? >> the price. it was relatively cheap. everything had to go right for it to go from 700 to 1,000. the street has decided the profit margin is going to get squeezed. and the stock is trading 8.5 times earnings. >> why trading at a discount to microsoft in almost every
metric. >> the answer, and i'm sure paul would agree, is the numbers were going to come down. it's actually a higher multiple. but still even then you have 150 billion in cash sitting there. the business itself, mid single digits. >> we are all connected. we have the apps, laptop, this and that. when is the breakdown? >> i think it is breaking down. >> apple certainly lost its edge on products. a lot of folks have caught up on the phones and the tablets. even though people are saying, no, it's a little bit better. to paul's point there is a software moat. it remains to be seen how strong it is. it is very helpful. they did the sale thing with
blackberry. it didn't help them. >> their software expertise is not as opinion. i think it should be 38 to 40. when it's 38 to 40, if you have a proper long-term perspective, and that is the event i'm looking for, no more earnings downgrades, then you buy with both hands. >> all right. paul meeks, there you go. buy with both hands. great to see you, buddy. >> thanks, paul. >> now it is your turn to join the apple conversation. what is your take? will apple meet, beat, or miss earnings estimates. wall street expectations overnight to $10.01 a share. that's the consensus. down from $10.07. i have a feeling the votes will be beat or miss.
if you meet that's like telling your wife, you look fine. >> try it. >> don't do that. have guts, america. it's on facebook, by the way. >> up next. >> whatever that is. >> we have a new book out by google executive chairman eric schmidt and jared cohen. they'll talk about the future of technology. "squawk" will be right back. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪
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welcome back to "squawk" this morningment google executive chairman eric schmidt and jared cohen teamed up on a new book about the new digital age reshaping the age of people, nations and business ranging from technology's effect on terrorism to privacy, security. guys, thank you for coming on this morning. really appreciate it. i've got the book in my hand. i read it. i stopped on page 74. i read the whole book. but i stopped at a quote on 74. given this week we just lived thh, t situation in boston, given all the issues about china, hacking and all sorts of things you wrote the following. capturing criminals and terrorists and prosecuting them will become more difficult. planning and executing crimes will be easier. and a person's ability to
publish slanderous, false or other information in the public sphere without accountability will improve. that encompasses everything we have been talking about around this tape all week. it made me think for all the great things technology has done for us, boy, do we have things to worry about. eric, do you worry? >> i do worry. i start with another 5 billion people going to join us on the internet. that's a tremendous thing for them, their health, education and for our safety. we want them to be educated members of the global civilization. you empower evil people. terrorists get phones too. it will be more difficult to detect. but terrorists will make mistakes. it will be impossible to track them down. that's what happened here with technology in the boston bombers. >> on one of the business elements this book raises is
about virtual currencies. at one point you talk about the real challenge being a accommodation hiding the physical location of services. if you're a business person, ceo or government trying to regulate all this, boy, does that seem tricky. >> it's a $2 trillion industry. add virtual currency and it only becomes more complicated. it's going to be increasingly difficult for criminals and terrorist toss operate off the grid. and to go back to the point eric was making, yes, it can be used for money laundereriing. when criminals are using technology the room for error goes up. any mistake they make or anybody in their network, either professionally or socially has the potential to unravel the entire network.
>> eric, do you see a day, a point in time where big businesses, whether google or others, decide to actually accept big coins as a currency or other forms of virtual currencies like that. >> big coins is a technological tour deforce. i don't know ultimately whether it will be legal. it is too early to say. what i do think is that in the spread of all of this globalization, you're going to have much more efficient money flows. in every case they will be trackable. you can track corruption. the other things. >> this is brian sullivan. will the web ultimately kill journalism or will it enhance it? i know they say social media will destroy the old media. however, when you look at twitter, most of what people are linking to would still be considered old media.
who are the content creators in the new age? >> we write extensively about the future of reporting in the new digital age. there's a similar biotic relationship that develops between people on the ground who are first to capture the content and people in the mainstream media who can analyze it. so it's not that the mainstream media will disappear. it's not that citizen media will take over. it's going to be the ultimate media partnership between those that verify and those that capture the content. >> what is the future, eric? how it's changing everything. when you look at google. if you go out 10 years, what is going to be radically different for people and companies? >> the biggest thing that will happen from google and other companies is that the device that you carry, you become even more dependent on. as you carry it, it will make suggestions. it will know much more about you. it will be very much the other half of you. it will do the things you're not very good at.
it has perfect memory. your memory is not so good. it can make suggestions that are aha moments. so the notion of it is an assistant, reminding you, hey, you bought a ticket. you need to get there. it's going to take this long to get to the airport. those will be the routine new uses of modern mobile technology. >> will that be one device? glasses. google coming out with glass. other wearable device? what will it be? >> we are seeing an explosion of different kinds of things. google glass the. digital watches. it has all occurred because of the digitization of the internet. little chips have common operating systems like android. it is produced by google and is free. and off you go. most of it will be phones and tablets. phones and tablets -- there will
be many, many different choice. and there will be other forms too. it's too early to call the glasses, although people are very excite build that. >> we talked jokingly about rise of the machines and how they will take over the world. is that really paranoiapossible? >> it will be a long time before the machines take over the world. the current problem with the machines is that the automation that they provide can automate out low-skilled wages. so the core problem in societiy is not that the machines taking over the world, but rather that automated machines are taking over low-skilled jobs and the answer to that is education. computers will get smarter and smarter, but will they be able to have the kind of judgment that humans have on a broad range of subjects? not for many, many decades. >> quick, jared, privacy. you guys know so much about all of us. should we just expect at one point in our lives that all of this will unfortunately get hacked and people will know everything about us? is that something that we'll
just have to deal with? >> the reality of a world where there's so much information it's kind of protecting privacy and security is essentially the ultimate shared responsibility between companies, government and people who are actually using the tools and more connectivity doesn't remove the importance of human judgment in the future and our belief and what we write about in the book is parents will have to educate their kids early on about the importance of privacy and education. they'll have to talk about online privacy and security years before it is relevant to talk about their kids about the birds and the bees. jared, the new digital age. thank you. appreciate it. >> when we come back, we have jim cramer, stocks to watch and we'll talk about what has him fired up ahead of the opening bell. stick around. .. as soon as i met fiona and i was describing the problem we were having with our rear brakes, she immediately triaged the situation, knew exactly what was wrong with it, the car was diagnosed properly, it was fixed correctly i have confidence knowing that if i take to ford it's going to
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i know what you're looking for. i'm not chained to your desk anymore. i'm faster and smarter now. and so much less expensive. i am your market data. and if i do say so myself, i have never looked better. superderivatives introduces dgx. data done differently. welcome back, everybody. let's get down to the new york stock exchange. jim cramer is here. i have to say i am so glad you're back. i was reading your tweet as you got caught up in the faa sequester and this is probably the first hand account of sewing th seeing this. >> we were about to take off and the pilot comes back and doesn't see me cnbc. the faa says we don't have
enough air traffic controllers to take off. i said is this from delta? the faa wanted to make it very clear to everyone onboard is that the reason we're not taking off is because they're shorthanded. oh, jim kramer from cnbc, would you please get the word out that we're not taking off because the faa said you cannot come from orlando. we're not ready. we don't have enough people. it was pretty amazing. >> it was orlando to where? la guard wra? >> orlando to kennedy. >> it was absolutely not a weather delay. we are ready to go. delta is ready to go. the faa says listen, you can't come in. we don't have enough people. we can't do the job. it was remarkable. we said how long? two and a half hours? why is that? >> maybe two and a half hours the faa says they might be able to round up enough people to land the airplanes in kennedy. >> that is stunning.
i was watching in horror because i have to travel next week. >> take the train. i was going to go to washington. forget the airplane. just get on the train. it's too high risk. they didn't know their plane would not take off until the doors were closed and we were wheels up in 15 minute, they thought was the maximum and the pilot comes back and says listen, we can't land. they don't have enough people to land us in kennedy. >> thank you for the tweets on that because honestly and we were glad you brought it to our attention. thank you very much. >> our guest host this morning is henry blodget. he has thoughts on there as well. squawk will be right back.
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built to keep you moving. see it in action at our guest host henry blodget also has thoughts on the faa. >> it is a nightmare story. i just think this is incredibly depressing for our country that this is the best we can do. all we can do is slash spending across the board. we are underinvesting in basic services. we don't have enough air traffic controllers? give me a break. >> the problem with the loss productivity. >> it's just embarrassing. our bridges are falling down, roads, we're starving that. the problem in the budget is health care